Parliamentary committees criticise gig economy

Taylor Review On Working Practices Suggests All Work In U.K. Should Be Fair

Greater guarantees on minimum wage should come via a premium rate on work that was outside contracted hours, coming under the remit of the Low Pay Commission, MPs said.

"Uber, Deliveroo and others like to bang the drum for the benefits of flexibility for their workforce but now all the burden of this flexibility is picked up by taxpayers and workers", she said, referring to the fact that gig firms do not have to pay the same rates of tax as businesses which employ staff on full-time or part-time contracts.

The Work and Pensions and Business, Energy and Industrial Strategy Committees today published a joint report and draft bill to close the loopholes that allow companies to use bogus "self-employment" status as a route to cheap labour and tax avoidance.

The government has said it will respond to the Matthew Taylor review by the end of the year. "It is time to close the loopholes that allow irresponsible [organisations] to underpay workers, avoid taxes and free ride on our welfare system".

Developments around this and other tribunal cases demonstrate that the gig-economy is facing an overdue redress.

Two influential parliamentary committees have published draft legislation that would crack down on the so-called "gig economy" employment practices used by the likes of Uber and Deliveroo, putting pressure on the government to take action.

"The Bill would put good business on a level playing field, not being undercut by bad business".

"Workingstatus is arguable and therefore it will be hard in practice to evidence that a business had deliberately and falsely classified workers as self-employed in considering a punitive fine".

Clearer statutory definitions of employment status: "This legislation should emphasise the importance of control and supervision of workers by a company, rather than a narrow focus on substitution, in distinguishing between workers and the genuine self-employed".

Unions said the reforms should go further.

Whilst the report is considered to be going in the right direction, unions fear there is still a long way to go.

Rachel Reeves, the Labour chairwoman of the Business Select Committee, said that workers rights should not be sacrificed for flexibility.

It also proposes ditching the Swedish derogation, a loophole which allows agency workers placed with companies to be paid less than direct employees, provided the agency agrees to continue paying them for at least four weeks at times when it is unable to find them work.

But the CBI, which represents employers, said the plans would take away the flexibility companies need to "grow and create jobs".

Uber, meanwhile, lost an appeal brought by two former drivers seeking to classify drivers as full employees and not self-employed and therefore entitled to holiday pay and the minimum wage.

However, Sarah Ozanne, an employment lawyer with law firm CMS, commented: "The proposed "worker by default" regime places the burden on businesses and risks reformulating the existing quagmire of what is genuine self-employment".

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